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Source: (consider it)
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Thread: End of the South China Sea conflict?
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Dave W.
Shipmate
# 8765
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Posted
quote:
Originally posted by mrWaters:
There is a huge difference between random sales of bonds and currency by millions of people and one big investor flooding the market at the right moment. This usually creates panic because other investors start asking themselves - does he know something I don't? Subsequently they tend to sell as they see the price going lower and lower and the circle begins.
This is nonsense. There's no question of "does he know something I don't" in this scenario. The US isn't some poorly-managed company full of secrets and ripe for a take down by a savvy short seller. It's a poorly-managed large country with an enormous economy whose many faults are known to one and all - and still, in the middle of the global financial crisis, investors rushed to lend the US their money. Nobody's going to think the Chinese have an inside line on information about the state of the US government or economy that everyone else doesn't already know. (And selling 1% of something hardly constitutes "flooding the market.") quote:
In the event of a war, US Navy and US carriers would most likely be deployed beyond 1st island chain actually (misremembered before). As noted in a Air-Sea Battle doctrine, the US offensive would most likely take place by sending bombers on long range missions to eliminate Chinese area denial capabilities. Sure, there are US bases in South Korea and Japan, bad news is that they are largely within reach of Chinese missiles. True, it would probably be incredibly difficult to destroy them. On the other hand, it would also be very risky to launch any offensive from them.
The shaky grasp of history and geography you've previously demonstrated doesn't instill confidence in the reliability of these assertions; you might consider shoring them up by citing some sources.
Posts: 2059 | From: the hub of the solar system | Registered: Nov 2004
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mrWaters
Shipmate
# 18171
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Posted
quote:
Originally posted by Dave W.:
It's a poorly-managed large country with an enormous economy whose many faults are known to one and all - and still, in the middle of the global financial crisis, investors rushed to lend the US their money.
Financial instruments do not have any intrinsic value. They are given value purely because we believe in them. Large and coordinated selloff is likely to affect investors (250 bn may be too low number, however China does have a lot more). Since a powerful state in serious conflict with DC would be responsible for the selloff I dare to claim that confidence in the US would be much lower than during the crisis. Still, those theories have never been tested and will hopefully never be tested. I do think that large ownership of US currency and debt is a stabilising factor in US-CN relations.
quote:
Originally posted by Dave W.:
The shaky grasp of history and geography you've previously demonstrated doesn't instill confidence in the reliability of these assertions; you might consider shoring them up by citing some sources.
I probably deserved that. I based my military commentary on chapter 6 in G. Allison's Destined for War. It is also mentioned (in much less detail) in the interview from my first post in this topic. More detail on capabilities of PLA and DOD can be found in this Rand report. Apparently by now, China has advantage or parity with the US in 6 out of 9 areas of conventional capabilities which are critical in a showdown around Taiwan and 4 out of 9 in a South China Sea military conflict.
DK - I only wanted to show commonalities between political expectations towards the US in two very different countries. Is Australia really like Afghanistan? In my understanding Oz would be incredibly difficult to invade due to its size and location. I don't believe there are any large and powerful tribes there plus not that many guns on the street (thank God for that IMHO).
Last thing, maybe because my grandparents come from eastern Ukraine I'm fairly scared of any and all possible annexations.
Posts: 80 | From: Aberdeen | Registered: Jul 2014
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Gramps49
Shipmate
# 16378
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Posted
One thing mrWaters does not seem to be aware of is China's own national debt which is currently $4 trillion. It is actually greater than the American national debt in terms of % to GDP. It cannot afford to flood the market with the very bonds it needs to support its own economy.
https://www.bloomberg.com/news/articles/2017-10-29/global-economy-s-health-at-stake-as-china-tries-to-hold-a-sneeze
In 2012 the US Department of Defense also came out with a report that said: "attempting to use U.S. Treasury securities as a coercive tool would have limited effect and likely would do more harm to China than to the United States. As the threat is not credible and the effect would be limited even if carried out, it does not offer China deterrence options, whether in the diplomatic, military, or economic realms, and this would remain true both in peacetime and in scenarios of crisis or war."
Moreover, the US Federal Reserve did a study that concluded "because foreign holdings of U.S. Treasury securities represent only a small part of total U.S. credit market debt outstanding, U.S. credit markets should be able to absorb without great difficulty any shift of foreign allocations."
Above citations referenced in
https://fas.org/sgp/crs/row/RL34314.pdf
In other words, the sky is not falling. No need to cry wolf.
Posts: 2193 | From: Pullman WA | Registered: Apr 2011
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Dark Knight
Super Zero
# 9415
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Posted
Hmmmm ... a thing you seem to be unaware of (apart from how to use URL) is how spectacularly the Fed has got it wrong in the past. GFC, anyone?
China's growing economic and industrial power must certainly be of concern to US interests. Particularly when the US have taken such careful measures in the past to destabilize governments that were viewed as potentially hostile (which backfired pretty spectacularly in Iran).
I don't disagree mrW - annexing is not good. But if China can achieve by trade and other means what it desires, I don't know why they would bother with annexing bits of Africa. Seems like an enormous bother for not much payoff.
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So don't ever call me lucky
You don't know what I done, what it was, who I lost, or what it cost me - A B Original: I C U
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Love is as strong as death (Song of Solomon 8:6).
Posts: 2958 | From: Beyond the Yellow Brick Road | Registered: Apr 2005
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Gramps49
Shipmate
# 16378
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Posted
DK I fully know how to use the URL codes on this message board, however, I choose to just add the url addresses as footnotes to what I said so I did not have to come up with another sentence. Besides, I am color blind, so when I am reading something that has a link in it I cannot identify the link.
Posts: 2193 | From: Pullman WA | Registered: Apr 2011
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Dave W.
Shipmate
# 8765
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Posted
quote:
Originally posted by mrWaters:
Since a powerful state in serious conflict with DC would be responsible for the selloff I dare to claim that confidence in the US would be much lower than during the crisis.
Sure, you can dare to claim any damn thing you want - it's a free internet! But it's still a really stupid idea.
You might just as well dare to claim that confidence in the US would go up, as people looked on in amazement at the Chinese government, saying "Look at those crazy people, trying to set their big pile of money on fire! Time to invest in some safe assets - US Treasury bonds!" quote:
quote:
Originally posted by Dave W.:
The shaky grasp of history and geography you've previously demonstrated doesn't instill confidence in the reliability of these assertions; you might consider shoring them up by citing some sources.
I probably deserved that. I based my military commentary on chapter 6 in G. Allison's Destined for War. It is also mentioned (in much less detail) in the interview from my first post in this topic. More detail on capabilities of PLA and DOD can be found in this Rand report. Apparently by now, China has advantage or parity with the US in 6 out of 9 areas of conventional capabilities which are critical in a showdown around Taiwan and 4 out of 9 in a South China Sea military conflict.
Thanks for the source. The situation seems rather less fraught than you portray, though, as the RAND report also notes that "To prevail in either Taiwan or the Spratly Islands, China’s offensive goals would require it to hold advantages in nearly all operational categories simultaneously. U.S. defensive goals could be achieved by holding the advantage in only a few areas."
Posts: 2059 | From: the hub of the solar system | Registered: Nov 2004
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Dark Knight
Super Zero
# 9415
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Posted
My apologjes, Gramps, I will leave hosting to the hosts. That was petty of me.
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So don't ever call me lucky
You don't know what I done, what it was, who I lost, or what it cost me - A B Original: I C U
----
Love is as strong as death (Song of Solomon 8:6).
Posts: 2958 | From: Beyond the Yellow Brick Road | Registered: Apr 2005
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